Samsung may pay as much as $10 per Android handset sold to Microsoft, in order to protect itself against Apple. (Source: Cell Phone Blog)

Licensing fee could give Samsung extra legal ammo against Apple

Microsoft (MSFT)
and South Korea's Samsung Electronics (SEO:005930) are
reportedly engrossed in intense intellectual property licensing negotiations.
The talks bring to mind the old adage "the enemy of my enemy is my
friend."

While Microsoft's Windows Phone 7 platform
competes with Android, both platforms share a common
enemy-- Apple, Inc. (AAPL).
As Apple tries
to fend off Android, it has turned to multiple lawsuits, first suing [1][2]
Taiwan's HTC Corp. (TPE:2498) (the top
Android phone maker at the time) andthen
suingSamsung (currently the top Android phone maker).

As both Samsung and HTCare
also WP7 handset makers, it behooves Microsoft on multiple levels to defend
these quasi-rivals. To that end, Microsoftentered
into a patent licensing agreement with HTC last year. HTC agreed to
give Microsoft a fee for every Android handset sold. In exchange it
received the use of Microsoft's IP, which has proved a useful shield to hold
back Apple's legal harassment.

Samsung, which has a sizable IP catalog of its
own, may opt for a similar deal. The current sticking point is the
licensing fee. Microsoft wants $15 USD per Android handset sold.
Samsung, reportedly, is willing to agree to around $10 USD per handset.

If the pair can reach an agreement, Samsung could
use its new resources to further defend itself against Apple in court.
That would be good news for U.S. customers, who could lose access to
Samsung's Android lineup if Applesucceeds
in blocking importsfrom the Asian gadget maker.

Samsung willsoon
become the world's largest phone maker, passing Microsoft's Finnish
ally, Nokia Oyj. (HEL:NOK1V).
The company is expected by analysts to have sold 3 million units of the
Galaxy S II since its late April debut, helping propel the company to total
estimated sales of 19 million units in calendar Q2 2011.

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